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Beginner’s guide to home loan refinancing

Last updated on March 31st, 2021 at 10:50 am by Bill Tsouvalas

Many Australians think about home loan refinancing because of the potential benefits and savings. Getting a home loan refinance means replacing your existing loan with a better one, which offers you more benefits. This article is going to offer you a few important tips that you need to consider anytime you think about refinancing.

Make sure you know what are you paying

Unfortunately, there are not many Australians who know exactly where their money goes when refinancing. Before taking this step, make sure you know how much you pay every month and don’t hesitate to ask your lender any question you have about your interest rate.

Check your current loan first

In recent years, interest rates have continued to drop to all-time lows. If you have a home loan that was set up a few years ago, you might be paying too much interest. From the beginning of 2012, interest rates have dropped by 2,25%. The home loan business is very competitive market, and many banks are offering lower rates or more favourable loan conditions especially to win business. This puts you the consumer in the box seat to take advantage.

Take into consideration changing lenders

Statistics reveals that more than 65% of the people who have a home loan at the moment could get a better deal. Once you have checked your current loan and found out that it is no longer a good choice for you, the next step is to verify other lenders.

Do some research on the Internet, discuss with your friends, visit a talk to a qualified broker that can source you the very best deal from some financiers that retail borrowers cannot access. Compare their offers and think about the advantages and disadvantages of every deal. This is a decision that will affect you for at least a few years, so there is no need to rush.

Consider all the refinancing costs

Almost every bank has some fees or costs when setting them up. Don’t omit these aspects when considering refinancing, because switching to another bank or loan may cost a small fortune. Pay attention to all these costs and make sure that refinancing is convenient for you.

Talk to lenders in order to find out more

Never hesitate to ask about all the things you do not understand before closing on a deal. Lenders can provide you concrete explanations and details, so talk to them. Better yet speak to a broker that can shop the market and work for you, the best part about it, it’s free.

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